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is this a reasonable thing to do??
nat38
Posts: 205 Forumite
I don't know if this is the right place to post this
My husband will need to spend half of the week away and will need to rent a place to stay. We thought we could avoid rent by buying a small property - he would use the place for say 2 years and we could rent it out afterwards.
We have £30 in savings and are about to receive another £25k. We can get £45k as extra borrowing from my current mortgage, so we’d pay the second house outright and we’d have a mortgage of £75k on our current home (valued at 100k). The mortgage deal is a tracker currently at 2.4% (+1.9% ABE). We have 15 years left on the mortgage, no ERC and will be able to make extra payments.
At first it made sense, but now I am starting to think that we maybe missing something - I need opinions please!
On top of this, we’ll probably have to move in 2 years, so by then we’ll have to sell one of the properties in order to get our future home….no idea if we'd be able to keep the same deal with the lender, etc etc. Should we just keep the cash for a bigger deposit later on?
Help!!
My husband will need to spend half of the week away and will need to rent a place to stay. We thought we could avoid rent by buying a small property - he would use the place for say 2 years and we could rent it out afterwards.
We have £30 in savings and are about to receive another £25k. We can get £45k as extra borrowing from my current mortgage, so we’d pay the second house outright and we’d have a mortgage of £75k on our current home (valued at 100k). The mortgage deal is a tracker currently at 2.4% (+1.9% ABE). We have 15 years left on the mortgage, no ERC and will be able to make extra payments.
At first it made sense, but now I am starting to think that we maybe missing something - I need opinions please!
On top of this, we’ll probably have to move in 2 years, so by then we’ll have to sell one of the properties in order to get our future home….no idea if we'd be able to keep the same deal with the lender, etc etc. Should we just keep the cash for a bigger deposit later on?
Help!!
0
Comments
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When you remortgage your current home, you may not get a deal as good as the one you are on now. No harm in asking a mortgage broker to take a look at the figures, though.poppy100
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How much rent would you be saving vs how much interest you will be paying on the mortgage & losing on the savings over the two years?
Have you got another rainy day pot for emergencies or are you thinking of using all of your savings?_____________________________________________Mortgage 1 £80k paid off july 2014Mortgage 2 £213k paid off May 20210 -
£6-7k per yearHow much rent would you be saving ?vs how much interest you will be paying on the mortgage?
i think the answer to this is ~£1.8k per year (i can be very wrong)& losing on the savings over the two years?
?
~3k max a year maybe?
i guess i should also take into account the costs of buying etcHave you got another rainy day pot for emergencies or are you thinking of using all of your savings?
yes, we still have some extra cash0
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